The long standing
stagnation of the UK defence budget has inevitably led to a reduction in jobs
in the defence industry — as a result, UK capability will be affected as
the sector risks losing highly skilled professionals deemed essential to the
defence support base, argues a new RUSI study.

It finds that 80 per cent of the
personnel leaving the defence business were lost to the sector as a whole,
while 45 per cent of those exiting were engineers, project managers, and
information specialists — all critical roles essential to a healthy
defence sector.

Thus the period under review saw
a real reduction in the number of people available to develop, produce and
support defence equipment, limiting the country’s capacity to respond to
changing threats and risks.

Nearly 70% of those responding
to the survey felt that they were not using the range of skills they had
learned in defence work, indicating that, at least as late as 2011, the British
economy was not generating significant demand for the high-value technical
expertise that the defence sector uses. On the positive side, only 1% of
respondents were still looking for work a year after losing their defence
jobs.

This study highlights the
economic impact this is to have not only on the defence sector but the economy
as a whole. It points out the loss of revenue to the exchequer as a result of
reductions made in the defence sector.

Of employees leaving the defence
business, more than half took more than six months to find a new job, which had
implications for the government’s benefits spend, and, when people found
work, over half took jobs that were less well paid than what they had
previously earned. This will have had consequences for tax revenue and
multiplier effects in the economy as a whole.

Finally, more than a third of
those responding to the RUSI survey had to relocate to find work: for areas
where industry is important on a regional scale – such as Barrow,
Preston, Blackburn and Portsmouth – suggesting that further defence cuts
are likely to have an impact on local authority revenues, housing prices and
consumer-facing businesses.

According to Professor John
Louth, one of the author’s of the study:
“For years there has been an accepted notion that once a defence business
in the UK made staff reductions another business would absorb these skills so
that defence capabilities remained. Yet, savings in government defence
spending, leading to job losses in industry, generate a significant diminution
in the national defence skills base. The military is dependent on these skills
to deliver defence capabilities on the frontline and throughout its supply
chain.”

Professor Trevor Taylor, also an
author, adds:
“For the first time, our research presents data on the effects of defence
spending reductions on the skills and competencies necessary for national
defence and security. Our work suggests that the national defence skills base,
located in on-shore industries, has significantly shrunk in recent years, with
consequences we are only now starting to understand.”

Notes to
Editors

1. The author of this paper are
Professor Trevor Taylor, Dr John Louth and Dr Henrik Heidenkamp.
2. This study is based on a survey of 2,500 ex-employees of BAE Systems,
the UK’s largest defence contractor. Each ex-employee was sent a
questionnaire seeking to capture information relating to the moment they left
the business and their subsequent activities. A number of informal,
semi-structured telephone interviews were also conducted where respondents had
indicated that they wished for a follow-up call to be made. Of the number of
questionnaires sent out, the research team received 586 responses in reply,
representing a return of 23.4 per cent. The methodological literature suggests
that this is a credible and relevant research return.
3. RUSI is an independent think-tank for defence
and security. RUSI is a unique institution; founded in 1831 by the Duke of
Wellington, it embodies nearly two centuries of forward thinking, free
discussion and careful reflection on defence and security
matters.